Juhudi Kilimo

Juhudi Kilimo is a microfinance organization, and a current Kiva field partner. Founded in 2009, they provide micro-asset financing for farmers, administering loans for the purchase of dairy cows, chickens, and irrigation equipment.

Juhudi would like to design, pilot, and scale a clean energy loan program so that they can begin to offer solar lighting, cook stove, and water loans to over 100,000 rural farmers over the next five years. In order to do this, they are working with MicroEnergy Credits (MEC), a for-profit social enterprise based in the US that works with financial institutions to set up and scale clean energy programs.

MEC and Juhudi are requesting a loan of $50,000 USD from Kiva lenders to help pay for the up-front costs of designing a loan program for clean energy that will eventually serve 100,000 rural farmers. The loan will help fund ⅓ of the costs that MEC will incur in supporting Juhudi Kilimo, and specifically it will go to pay for the following program areas:

• Hiring a program manager who will help perform market research, business planning, financial product design, pilot implementation, course correction, and scale-up of the clean energy lending program. The program manager will facilitate supplier relationships and ensure the data collection systems are in place to capture carbon revenue.

• Setting up “Carbon Tracker”: MicroEnergy Credits has developed carbon offset data management software called Carbon Tracker that enables an MFI to track clean energy product sales and delivery. This database is used to generate investment-grade carbon offsets and plays an integral role in after-sales services and monitoring. Part of this loan will be used set up Juhudi Kilimo with this software.

• Establishing a carbon offset program at Juhudi Kilimo: MicroEnergy Credits facilitates the carbon origination, validation, and purchase agreements for the offsets generated by the MFIs clean energy loans. The up-front costs of this will be partially covered by this loan.

• Hiring MicroEnergy Officers (MEO): MEOs are front-line staff who will be placed at the branches within Juhudi Kilimo, and are providing clean energy marketing, last-mile distribution, and after-sales and warranty support.

Millions of families and small businesses around the world use outdated technology to light and warm their homes, cook their food, and clean their drinking water. The majority of rural Kenyans use inefficient stoves for cooking that use wood or charcoal for fuel, but these stoves produce harmful emissions and have a significant detrimental effect on health. Similarly, many rural Kenyans are not connected to the electricity grid and rely on kerosene lanterns for light, however these technologies produce emissions that are harmful to the users' health.

Three main barriers exist that prevent the poor from upgrading to newer, cleaner, more efficient technologies:

• Poor distribution: poor infrastructure and low population density inhibit clean energy supplier outreach.
• Lack of marketing: rural farmers have limited access to markets and information about new products. In many instances,
purchasing a new product requires a clear explanation of the value proposition.
• Access to finance: many clean energy technologies are only affordable through credit mechanisms.

This loan will help Juhudi Kilimo, with the assistance and technical support of MEC, to address these barriers by connecting Juhudi to clean energy suppliers and carbon finance.

This loan will be repaid by MEC on behalf of Juhudi Kilimo with carbon offset revenues, and also by the margin that MEC will earn from purchasing technologies from clean energy suppliers. Loan repayments will come from MEC’s profits.

Additional Information

About MicroEnergy Credits

MicroEnergy Credits (MEC) is a Seattle-based social enterprise dedicated to empowering people in developing countries to choose healthy, clean, and affordable energy alternatives. By providing established MFIs with the technical and strategic support necessary to develop new sustainable clean energy lending products, MEC aims to overcome the barriers currently preventing impoverished communities from accessing cleaner, more efficient technologies.

MEC partners with microfinance institutions, training them to start scalable clean energy lending programs, and tracking the carbon emission reductions from the switch to green energy. MEC then sells these carbon credits on the voluntary carbon market, sharing the proceeds between the partner MFI and itself to ensure sustainability. This fee structure may result in more or less than the principal value being returned to MEC, depending on the performance of the carbon credit markets.

Through this loan, Kiva’s lenders’ funds will support a new green loan development program within East Africa. By helping these organizations to provide these products, you are in fact helping tens of thousands of people to access cleaner, safer and cheaper energy.